Tom's Top Tips for First Time Homebuyers
I'm sure I can make the whole process of buying your first home less intimidating.
Lets start by breaking your buying process down into a few easy steps
1) Pre-Qualification:
Where do I get a mortgage from? Choose a lender.
The first most logical step is to find out how much you can be
"pre-approved" for. This process looks at your current income versus your monthly payments and proposed mortgage payment to determine your debt service ratio. With your permission, your mortgage lender will also access your credit bureau to be sure that when you do find your dream home there will be no surprise delays in securing your mortgage financing that could put getting that home in jeopardy.
You have multiple downpayment options when it comes to buying your
first home. Up until only a few years ago, the minimum down payment
was 5%, but now you can buy a home with zero down or 100% financing.
It is surprising how many people want to purchase a home, but don't
because they believe that a hefty down payment is required. Zero down
programs are becoming very common.
Pre-qualification is what gives you buying power and allows you to
make an offer on your dream home when you've found it. The Seller
likes to hear that the Buyer is pre-qualified when considering an
offer.
More importantly, pre-qualification will let you know how much your
new home will actually cost - in monthly payments. Choose the payment
in your comfort zone, and you know the price range to shop in.
This process is very easy to do and will only cost you a little of you time.
2) Consult a Real Estate Professional
Find a Real Estate Agent as soon as possible and get in on the ground
floor. Realtors have access to the Multiple Listing Service which is a
database of approximately 99% of the homes for sale in a given market.
Your Realtor can automatically scan the MLS Daily Bulletin for new
listings that meet your criteria. As a new prospect you ca be notified
through E- Mail immediately. Real-estate offices upload to the
Multiple Listing System at all times throughout the day. This priority
access allows you to beat-out other buyers, and can help you save your
Time and Money. Get the Competitive Edge.
I can tell you this for sure, Buying a house is more complex than ever
before. Find a Real Estate Agent with knowledge of your specific
market and willingness to help. You may want to interview a few agents
and choose one that you feel comfortable with. You may even want to
consider asking for references from Buyers with whom the Realtor has
worked previously. A realtor can also show you a list of homes that
sold recently in the area and their selling prices, giving you even
more specific market knowledge. Don't hesitate to ask.
You'll find a Realtors help & insight invaluable - and you'll be glad
you contacted your Real Estate Agent sooner, rather than later.
3) "Must Haves" & "Wants"
Make a list. Your "must haves" are the necessities in your new home,
you may not even need to view a home if it doesn't have every "must
have." Great examples of your "must haves" are price, school district,
size, etc... Your "wants" are the qualities that you would like for
your new home to have, but it's not a necessity. Examples of "wants"
are color, flooring, appliances, and type of exterior.
House hunting is a form of "market research" Each home you look at
will give you additional knowledge about the features of homes in the
neighborhood and the price you can expect to pay for the specific home
that interests you.I can assure you that after you have looked at a
few , you'll become more comfortable with the process and develop an
eye for the good and not so good things about the homes you see.
4) Location Location Location
I know...you have heard this saying a million times but... You can
always make changes to your house, but you can never change its
location. Pay attention to area amenities, how well the yards & common
areas are kept. A heavy rental area may be lacking in "pride of
ownership.
5) Step up....
Don't wait and let another buyer take YOUR home! It's normal to be
nervous when buying your first home. However, if you do your due
diligence - and if you followed my steps above - then you will have
your bases covered.
Good Luck,
Tom.
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